MANHATTAN BEACH, CA ‚Äď Auto dealer Kevin Reilly holds various sheepskins from top universities: bachelor degrees from Georgetown; a law degree from the University of Virginia; and a master‚Äôs in business administration from Duke.
So it‚Äôs not surprising Reilly took a studious approach in selecting, launching and implementing a modern customer-relationship management system for his Virginia dealership, Alexandria, near Washington.
He has learned a lot along the way, including how to control costs and make sure the high-tech system is uncomplicated enough and the training good enough for dealership personnel to handle.
‚ÄúToo much technology is just as troublesome as too little technology,‚ÄĚ says Reilly, sharing his knowledge at an E.N.G. automotive CRM conference here.
But on the too-little end, many dealers think CRM is a function of Microsoft Office, or that ‚Äúyou can just take it off the shelf,‚ÄĚ Reilly says.
‚ÄúCRM is not ‚ÄėI‚Äôll take No.3 supersized,‚Äô‚ÄĚ Reilly says. ‚ÄúIt‚Äôs made to measure.‚ÄĚ
Consequently, selecting the right ‚Äúvendor-partner‚ÄĚ is as important as the CRM solution you choose,‚ÄĚ he says, citing functionality, range of offerings and a track record as what to look for in purveyors of information technology.
Other things to focus on: flexibility, pricing, terms (as in length of contract), support, training and references.
But it is more than just picking out a good system, then sitting back and watching it turn prospects into sales, he says.
It also is a matter of getting staffers to systematically obtain, pursue, cultivate, track and close leads using sophisticated computer software that requires a certain skill level and degree of motivation.
It means sometimes taking employees to where they don‚Äôt want to go.
‚ÄúThe chief obstacle for the success of your people is your people,‚ÄĚ Reilly says, paraphrasing American humorist Don Marquis. ‚ÄúIt‚Äôs human nature. We don‚Äôt like change, even if it helps you make more money and gets you more customers.‚ÄĚ
To procure employee buy-in, Reilly says he assembled his staff and told them, ‚ÄúThis is the way it is going to be done. It‚Äôs non-negotiable. We‚Äôre spending too much for it otherwise.‚ÄĚ
He says most employees ‚Äúgot it.‚ÄĚ About 30% resisted. A way to overcome that is to reward staffers for using the system, not just for achieving improved sales and margins.
‚ÄúThe price of inaction is far greater than the cost of making a mistake,‚ÄĚ Reilly says, quoting Meister Eckhart, a 14th century philosopher.
Also in Reilly‚Äôs textbook of CRM success is the need to make sure entered data is complete and accurate.
Accordingly, questions to ask include:
- ‚ÄúAre we capturing critical data points, such as cell-phone numbers and email addresses?‚ÄĚ
- ‚ÄúHow do we quickly check data captures to avoid gaps, such as missing percentage fields?‚ÄĚ
- ‚ÄúWhat are the most important metrics to track and review? Number of clients? Closing percentages? Lead sources? Number of test drives? Turnovers?‚ÄĚ
Such issues need to be discussed on a regular basis,‚ÄĚ Reilly says. ‚ÄúMake key metrics an inviolate part of your meetings.‚ÄĚ
He says the dealer principal or general manager should make reports easily accessible and department managers should ‚Äúincorporate performance reviews in daily work plans.‚ÄĚ
Reilly founded Alexandriain 2001. Since then, it has won sales and satisfaction awards.
It annually sells 1,000-1,300 new vehicles in a department consisting of eight to nine salespersons that are computer-friendly and moderately experienced.
Reilly says his new-car customers tend to be professionals who are Internet savvy, confident and expecting a high level of service.
His 2-salesperson used-car department sells about 400-500 units a year, about 90% through Hyundai Motor America Inc.‚Äôs certified pre-owned program. Reilly says his used-car customers generally are Internet savvy and value conscious.
The service department ‚Äď consisting of seven technicians, two service writers and a ‚Äúhands-on‚ÄĚ manager ‚Äď handles 800-1,000 repair orders a month. The customer base is loyal, value conscious and willing to invest, Reilly says.
He praises Hyundai Motor Co. Ltd. for its 7-model lineup and the progress it has made in product quality and refinement during its 21 years in the U.S.
‚ÄúThere‚Äôs the story of a Hyundai salesman back in 1986 who went on a test drive with a customer in an Excel and had to turn off the air conditioner to get enough power to go up a hill,‚ÄĚ Reilly says.
Contrast that with an ‚Äô07 Hyundai Vera Cruz that sells for $35,000, he says.
‚ÄúWho would have thought Hyundai would be selling this luxury SUV, one that is rated higher than the Lexus RX 350?‚ÄĚ
He notes that during those two decades, tools for developing and tracking sales prospects have gone from Rolodex card files to sophisticated CRM software.
Reilly says he lacked the money to buy a proper CRM system until Hyundai this year increased U.S. dealers‚Äô profit margins. ‚ÄúIt allowed us to be moderately profitable and make these investments.‚ÄĚ
He offers nine ‚Äútakeaways‚ÄĚ on selecting, launching and implementing a CRM system at an auto dealership:
- Shop and compare, especially at the National Automobile Dealers Assn. convention where nearly 70 CRM vendors occupy exhibit floor space.
- Set a firm timetable for consideration and purchase. ‚ÄúThis is easier said than done, but you can be paralyzed by too much analysis and spend years looking at companies.‚ÄĚ
- Utilize a ‚Äúphased‚ÄĚ approach to CRM functionality purchases. Otherwise, the staff may become overwhelmed.
- Provide the CRM consultant a written overview of the dealership‚Äôs people and processes. ‚ÄúIt helps your vendor if it is on paper. It helps tech people develop a program and gets you up to speed faster.‚ÄĚ
- Identify CRM champions to handle post-installation issues. ‚ÄúIt‚Äôs easy at the beginning when the CRM firm‚Äôs tech support staff is at your dealership. It‚Äôs different when they are gone.‚ÄĚ
- Launch the system in the beginning or middle of the month. At month‚Äôs end, staff is focused on sales goals.
- Focus immediately on the 20% that will yield 80% of results. ‚ÄúYou want people to feel successful, so they can do more.‚ÄĚ
- Incorporate CRM metrics and reports into regular staff meetings. ‚ÄúCover who‚Äôs doing what well; who‚Äôs not.‚ÄĚ
- Incorporate CRM into pay plans and reward activities, not just results. ‚ÄúI told my staff they won‚Äôt get bonuses if they don‚Äôt meet metric standards. That‚Äôs what the factory does to dealers when it says: ‚ÄėWe‚Äôll pay you this if you do that.‚Äô‚ÄĚ
Tongue in cheek, Reilly offers a final piece of CRM-implentation advice: ‚ÄúSet up monthly payment plans through American Express. If all else fails, at least you‚Äôll earn points towards a well-earned vacation.‚ÄĚ